Weekly Chartbook

By: Aaron Lang - Portfolio Analyst

October 20, 2021

Posted By

Market Performance (YTD)

Source: YCharts
Disclaimer: Past performance is no guarantee of future performance

The Good News

Earnings are so far, so good

The Bad News

Earnings revisions are continuing to fall

And GDP estimates continue to be revised downwards

There seems to be a disconnect with earnings estimates and GDP estimates

The State Of The Market

The inflation concern has legs and is picking up steam. It’s less about supply chains getting worse – there are actually signs that the worst may be behind us. Though, that’s not to say it won’t be concern for a while longer. 

And, yes, there are a lot of transitory aspects of this inflation surge we are seeing

But wages have and will continue to be the signal to watch. And there’s reason to believe wage growth will continue higher than many currently believe.  

And the record high quits rate is a signal that many employees are realizing they have some power

So how have bonds done with this global inflation surge? Not great.

And yields should probably be even higher than they are now

As for stocks, margins are expected to reach record highs in 2022. If inflation continues higher than expected, those expectations may be too high.

Here are how the different sectors should be able to handle rising inflation

Charts Of The Week

Thread Of The Week


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